We argue that Gibson's paradox has nothing to do with the Gold Standard per se, and it rather originates from low-frequency variation in the natural rate of interest under certain types of monetary regimes that make inflation I(0) and (approximately) zero-mean. Although the Gold Standard is the...

We study alternative monetary policy strategies in the presence of the lower bound on nominal interest rates and a low equilibrium real rate using an estimated DSGE model for the euro area. We demonstrate that simple feedback rules that implement inflation targeting result in a binding lower...

The extent to which households are financially included may influence central banks’ operation of monetary policy. In such cases, authorities will not need to adjust interest rates as aggressively to key macro variables to have the necessary impact on the economy. Using data for 47 emerging...

The contribution of energy shocks to euro-area inflation in 2022 is larger than that of shocks to aggregate and supply, and to monetary policy. Had the ECB tightened monetary policy more than implied by the actual policy rate to counter the energy shocks, growth and inflation would have been...

Inflation target formulations differ across countries and over time. Most widespread are point targets, target ranges, hybrid combinations of the two, or mere definitions of price stability. This paper proposes a novel empirical measure of expectations anchoring based on the cross-sectional...

The resurgence of inflation since the late 2021 is now accompanied by a reversal of prospects of growth, reviving fears of stagflation across the world (IMF 2022, World Bank 2022). In almost all accounts of the mounting stagflation threats a prominent role is played by the fall of households'...